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Reasons to Add National Grid (NGG) to Your Portfolio Right Now
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National Grid Transco’s (NGG - Free Report) strategic investment plans should further expand its existing operations and boost its performance. Given its growth opportunities, National Grid makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for NGG’s fiscal 2024 earnings per share (EPS) has increased 5.1% to $4.37 in the past 90 days.
The Zacks Consensus Estimate for NGG’s fiscal 2025 EPS has increased 3.8% to $4.63 in the past 90 days.
NGG’s long-term (three to five-year) earnings growth rate is 3.2%.
Debt Position
Currently, NGG’s total debt to capital is 58.82%, much better than the industry’s average of 61.51%.
The time-to-interest earned ratio at the end of fiscal 2023 was 3.2. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
National Grid has been consistently increasing shareholders’ value by paying dividends. In November 2023, it announced a half-yearly dividend of $1.19 per share and an annual dividend of $2.37. The company’s current dividend yield is 3.46%, better than the Zacks S&P 500 Composite's average of 1.28%.
Emission Reduction Efforts
NGG is committed to maintaining its focus on consumers and stakeholders’ priorities through its journey to net zero carbon emission goal. The company will achieve net zero for its scope 1 and 2 emissions by 2050, with interim targets of a 50% reduction by 2030 and 34% by 2026 from a 2018/19 baseline.
National Grid will also move toward a 100% alternative fuel fleet by 2030 and 100% renewable electricity for its own use, with a 20% increase in energy efficiency for its offices by 2026.
Systematic Investments
NGG has plans to invest more than $52 billion by 2026 in the U.K. and the United States in its five-year spending framework. The company has increased its investment in 17 major onshore and offshore transmission projects in the U.K. after the energy regulator Ofgem fast-tracked the same.
NGG is also planning to invest more than $4 billion in a portfolio of transmission enhancement to modernize its energy delivery network across Upstate New York.
Price Performance
In the past six months, National Grid’s shares have rallied 17.2% compared with the industry’s growth of 11.5%.
NiSource’s long-term earnings growth rate is 7.20%. The Zacks Consensus Estimate for NI’s 2024 sales implies an improvement of 11.5% from that recorded in 2023.
UTL’s long-term earnings growth rate is 7.10%. The Zacks Consensus Estimate for UTL’s 2024 sales implies an improvement of 3.69% from that recorded in 2023.
The Zacks Consensus Estimate for TAC’s 2024 EPS improved 18.6% over the last 60 days. The company delivered an average earnings surprise of 142.6% in the last four quarters.
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Reasons to Add National Grid (NGG) to Your Portfolio Right Now
National Grid Transco’s (NGG - Free Report) strategic investment plans should further expand its existing operations and boost its performance. Given its growth opportunities, National Grid makes for a solid investment option in the utility sector.
Let’s focus on the factors that make this Zacks Rank #2 (Buy) company a strong investment pick at the moment.
Growth Projections
The Zacks Consensus Estimate for NGG’s fiscal 2024 earnings per share (EPS) has increased 5.1% to $4.37 in the past 90 days.
The Zacks Consensus Estimate for NGG’s fiscal 2025 EPS has increased 3.8% to $4.63 in the past 90 days.
NGG’s long-term (three to five-year) earnings growth rate is 3.2%.
Debt Position
Currently, NGG’s total debt to capital is 58.82%, much better than the industry’s average of 61.51%.
The time-to-interest earned ratio at the end of fiscal 2023 was 3.2. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
Dividend History
National Grid has been consistently increasing shareholders’ value by paying dividends. In November 2023, it announced a half-yearly dividend of $1.19 per share and an annual dividend of $2.37. The company’s current dividend yield is 3.46%, better than the Zacks S&P 500 Composite's average of 1.28%.
Emission Reduction Efforts
NGG is committed to maintaining its focus on consumers and stakeholders’ priorities through its journey to net zero carbon emission goal. The company will achieve net zero for its scope 1 and 2 emissions by 2050, with interim targets of a 50% reduction by 2030 and 34% by 2026 from a 2018/19 baseline.
National Grid will also move toward a 100% alternative fuel fleet by 2030 and 100% renewable electricity for its own use, with a 20% increase in energy efficiency for its offices by 2026.
Systematic Investments
NGG has plans to invest more than $52 billion by 2026 in the U.K. and the United States in its five-year spending framework. The company has increased its investment in 17 major onshore and offshore transmission projects in the U.K. after the energy regulator Ofgem fast-tracked the same.
NGG is also planning to invest more than $4 billion in a portfolio of transmission enhancement to modernize its energy delivery network across Upstate New York.
Price Performance
In the past six months, National Grid’s shares have rallied 17.2% compared with the industry’s growth of 11.5%.
Image Source: Zacks Investment Research
Other Stocks to Consider
A few other top-ranked stocks from the same industry are NiSource Inc. (NI - Free Report) , Unitil Corporation (UTL - Free Report) and TransAlta (TAC - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NiSource’s long-term earnings growth rate is 7.20%. The Zacks Consensus Estimate for NI’s 2024 sales implies an improvement of 11.5% from that recorded in 2023.
UTL’s long-term earnings growth rate is 7.10%. The Zacks Consensus Estimate for UTL’s 2024 sales implies an improvement of 3.69% from that recorded in 2023.
The Zacks Consensus Estimate for TAC’s 2024 EPS improved 18.6% over the last 60 days. The company delivered an average earnings surprise of 142.6% in the last four quarters.